- Del Taco released its Q1 results last month and reported its best quarter for revenue growth in more than two years.
- Despite minimum wage increases in its largest market, Del Taco also reported moderate restaurant-level margin expansion, helped by food deflation and labor efficiencies.
- However, food deflation is not likely to continue, and while margins were up, they have trended lower over the past few years.
- So, while the investment thesis for Del Taco is improving with healthy unit growth and both remodels and a loyalty program on the way, I don't see any reason to pay up for the stock here above $10.65.
For further details see:
Del Taco: A Solid Start To The Year